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Ken Henry Tax Reform

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trainspotter said:
Julia Gizzard asked "So you are going to continue accepting contributions from the tobacco companies to the Liberal Party?"
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As a politician Tony Abbott should have been able to handle/avoid that question with ease. For a start he should have not fallen into the trap of allowing Julia Gillard to change the subject.

Learn Tony and learn quickly.
 
There was something in the paper today about some sort of tax break on savings, that may lure money away from housing investment, im wondering how this would work...the savings tax break i mean.
 
If a national resource rent tax does not replace state mining royalties and the end result is two taxes then it will be clear the Henry Review is just a front for increasing taxes.
 
So_Cynical said:
There was something in the paper today about some sort of tax break on savings, that may lure money away from housing investment, im wondering how this would work...the savings tax break i mean.
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You have to lock it away for 5 to 10 years and it will be capped at $10000 is the speculation.

This is the sort of nonsense we should be moving away from. Banks will simply discount the interest rate on qualifying deposit products to after tax yields from non-qualifying deposits so the benefit will be more to the bank than the depositer.
 
So_Cynical said:
... im wondering how this would work...the savings tax break i mean.
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Possibly some means tested tax reduction on all or part of interest earned on savings account.

(More important work for Gov machine to justify their existence)
 
The Coalition Government introduced a savings rebate in the late 90's. 15% tax rebate on interest earned up to a maximum of $3000 IIRC.

It didn't last very long.

If the government is serious about encouraging deposits then a simple option would be to make the first $xxxx ($1000 for example) of interest income tax exempt. This would do much to encourage a broader savings culture from the population as a whole.
 
drsmith said:
As a politician Tony Abbott should have been able to handle/avoid that question with ease. For a start he should have not fallen into the trap of allowing Julia Gillard to change the subject.

Learn Tony and learn quickly.
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It's peculiar, isn't it. Tony Abbott is far from silly. You'd think he'd have mastered the very basic art of not being diverted by now.
This is the sort of stuff that worries the electorate. In one sense, we like that he's basically fairly straightforward and outspoken, but he has the most immense capacity to stuff up what should be pretty damn simple.

What he needs is someone like Nick Minchin sitting on his shoulder all the time.
 
drsmith said:
If the government is serious about encouraging deposits then a simple option would be to make the first $xxxx ($1000 for example) of interest income tax exempt. This would do much to encourage a broader savings culture from the population as a whole.
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mmm ill vote #1 for that. :) would have no impact on the ease of doing a tax return as well and wouldn't need to be means tested as it wouldn't influence anyone will money...and that's probably what they need to encourage, people with money to save money.
 
So_Cynical said:
...and that's probably what they need to encourage, people with money to save money.
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i understand your point, but disagree. people with money need to do the things they are famous for, being creating opportunities for themselves thru large scale investment (property devel, business, venture capital, anything entrepreneurial) and ultimately creating employment and income for the masses. the masses then need to be encouraged to put money aside for a rainy day/save for that home purchase and not feel the need to blow every dollar they earn, due to the interest being taxed at say 30%, or the interest earned reducing the centrelink benefits received (pls dont begin arguments on that here).

bank interest, and that means simple bank interest earned in easily accessible, common accounts, including fixed term deposits or compounding interest accounts, only invested with institutions with home & small business lending policies (not merchant banks etc) need to have some level of 'tax free threshold' as incentive for the masses to actually put some money aside.
and likewise that same threshold provided to encourage those receiving centrelink payments to put something aside and not lose 50c in every dollar of interest earned.

REAL INCENTIVES TO HAVE THE MASSES SAVE SOMETHING, AND NOT SPEND EVERYTHING.
 
Now they're talking!

Small business 'to win tax breaks'

1st May 2010

SMALL businesses will reportedly receive faster tax breaks under an overhaul of the tax system to be unveiled on Sunday.

Treasurer Wayne Swan will release the review of the tax system by Treasury secretary Ken Henry on Sunday afternoon, as well as the government's response.

He is expected to reveal a package of sweeteners for small businesses, including allowing small firms to claim the full value of some assets as a tax deduction over one year instead of several, the Herald Sun reports.

The package will also include investment allowances to buy cars, computers and machinery.

"Small businesses have been a crucial part of our economic success during the global recession and they deserve to be the long-term winner in our plans for the tax system," Mr Swan told the newspaper.

The tax shake-up is also expected to abolish tax returns for ordinary workers with simple tax affairs, overhaul superannuation tax, change alcohol tax and simplify childcare benefits.
http://www.news-mail.com.au/story/2010/05/01/small-business-to-win-tax-breaks/
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Rudd is rat cunning. He is targeting those his constituent dislikes like smokers, big resource companies and the rich in general.

He is favouring the popular small business sector and of course working families.

This is great wedge politics.
 
Re smokers, aren't the small number of Australians who smoke likely to have been Labor voters? Won't he lose their votes?
Although no one will oppose the additional tax on cigarettes, most people will see it for what it is, i.e. a tax grab pure and simple rather than any concern about the health of smokers. It's one way of generating some funding for all his stuff-ups that he knows the Opposition will not resist.
 
Personaly I think the tax grab on cigaretes is most likely an enforcement of the user pays principal. Cigarete smokers are the biggest and most expensive drain on the health system. Kevin Rudd has to fund his proposed national program from somewhere and cigarete smokers are the logical choice. However it may back fire on him, as Julia points out there are a lot of smokers out there in the labour heartlands.
 
Nulla, as I understand it, the taxes on cigarettes more than pay for the cost of smoking related illness.
I'd be more impressed by this additional tax if it were to pay to put 'quit smoking' medications on the PBS. That would at least be an indication the government was sincerely concerned to reducing smoking.
 
Julia said:
Superannuation contributions to rise from 9% to 12%.

http://www.smh.com.au/business/fede...olution-levy-to-jump-to-12-20100502-u0tu.html
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This is going to put a lot of stress on business isn't it? I wonder if wage increases will freeze to compensate. Surely. And then, what's the net gain? Nada. I suppose it's forced savings, something we're not very good at. Will be interesting to see how it pans out.

The mining tax could be one of the storms brewing out there about to collide...
 
0.25% increase in 2013/2014 then 0.50%PA therefter.

not too bad on businesses.... considering the write offs availiable for small businesses
 

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